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Surgery Partners to Acquire National Surgical Healthcare for $760 million

Posted in Healthcare Services Investing

Surgery Partners has announced it will acquire National Surgical Healthcare (NSH) from Irving Place Capital for approximately $760 million.

Surgery Partners, based in Nashville, Tenn., is an operator of surgical facilities across the United States. It has more than 150 locations in 29 states, including ambulatory surgery centers (ASCs), surgical hospitals, a diagnostic laboratory, multi-specialty physician practices and urgent care facilities.

NSH, based in Chicago, owns, operates and partners with physicians in the short-stay surgical hospital and ASC industry. NSH owns and operates 21 surgical facilities, specializing in orthopedic surgery, spine and back, pain management and neurosurgery.

Irving Place Capital, based in New York, is a PE firm that targets middle-market companies for a wide range of investments in a number of industries.

Funding for Surgery Partners’ acquisition of NSH will be provided in part by Bain Capital Private Equity. Bain Capital, with North American offices in Boston and New York, invests in several industries, including healthcare.

In conjunction with the transaction, Bain Capital will acquire H.I.G. Capital’s existing equity stake in Surgery Partners. H.I.G. is a PE investment firm based in Boston.

The transaction is expected to close during 2017.

The ASC sector remains a hotbed of transaction activity, with news of the NSH acquisition by Surgery Partners coming just a few months after Optum announced it would acquire Surgical Care Affiliates (read our report on the acquisition and its possible implications here). Because activity in the ASC sector shows no signs of slowing down, PE interest in ASCs and surgery center companies is likely to remain high. New market investors would be wise to watch out for potential legal trapdoors.